Mandatory e invoicing from April 2029: what to check now

From April 2029, every VAT invoice one UK business sends another, or sends to a public body, must be a structured electronic invoice. A PDF attached to an email will no longer count. If you are VAT registered and invoice business customers, start by listing every system that creates your invoices, especially a booking or ordering system you had built, and checking whether it can send invoice data rather than a document.

What did the government actually announce?

The government confirmed at Budget 2025, on 26 November 2025, that all VAT invoices will have to be issued in a specified electronic format from April 2029 . The rule covers sales to other businesses and to government bodies where VAT is due.

The detail that catches people out is the definition. In its consultation response , the government describes e invoicing as the digital exchange of invoice data directly between the supplier's and the buyer's financial systems. It says plainly that PDF, Word, JPEG, HTML, scanned and faxed invoices do not count.

In other words, an invoice that a person has to open and read is not an e invoice. An e invoice is data that the customer's accounting software can take in and process without anyone retyping it.

Who has to switch to e invoicing in 2029?

The mandate applies to VAT invoices, so in practice it reaches businesses that are VAT registered and sell to other businesses or to the public sector. The VAT registration threshold is currently £90,000 of taxable turnover, and plenty of smaller firms register voluntarily too.

Sales to consumers are outside the mandate. A café selling coffee to the public, or an app selling subscriptions to individuals, is not being asked to send structured invoices to those customers.

Many businesses sit in both camps. A caterer might take bookings from families and from companies, and a training provider might sell places to individuals and to employers. Only the business side of that trade is caught, so the first job is knowing which of your invoices go to whom.

Why invoices from your own systems matter most

If every invoice you raise comes out of a mainstream accounting product, your supplier will very likely handle the switch for you. The government expects the market to offer low cost products, and the consultation response notes that some Making Tax Digital software providers already support e invoicing.

The harder case is the invoice that never touches your accounting software at the point it is created. Common examples:

• a booking system that emails a PDF confirmation with a VAT breakdown to a corporate client
• an online trade ordering portal that generates its own invoice when an order ships
• a custom web app or internal tool that produces monthly statements for business accounts
• a spreadsheet or document template someone fills in and saves as a PDF

Each of these is a document generator. From April 2029, for business customers, a document is not enough. The system either needs to send structured invoice data over the approved network, or hand the invoice data to software that can.

This is the part of the change that will not fix itself. Your accounting provider will update their product, but nobody is going to update the booking system a developer built for you in 2021 unless you ask.

What is Peppol and why does it keep coming up?

Peppol is an international network and set of standards for sending electronic invoices between businesses, already used widely across Europe and by parts of the NHS. In June 2026 the government announced in its tax update that Peppol will be the core interoperability network for e invoicing in the UK.

The UK has chosen what is called a decentralised model. Rather than uploading every invoice to an HMRC portal, businesses exchange invoices through their chosen software providers, which connect to the network. The government has also said it will not introduce real time reporting of invoices to HMRC in 2029, though it may consider that later.

For a small business, the practical meaning is this. You will not need to understand Peppol in depth. You will need every system that issues business invoices to either connect to a Peppol service provider or pass its data to one that does.

What will the Budget roadmap on 28 October 2026 tell us?

The Autumn Budget is on Wednesday 28 October 2026 , and the government has committed to publishing its implementation roadmap for e invoicing alongside it. Standards and guidance are due to follow before the mandate starts.

The open questions worth watching for are:

• whether the switch happens for everyone at once in April 2029 or is phased by business size
• the exact data format invoices must use
• what happens to older systems that cannot connect to the network, which the government says it is still discussing
• what guidance, training and support small businesses will get, since the consultation response stops short of promising any funding

Until the standards are published, nobody should be selling you a finished "2029 compliant" invoicing build. Anyone who is is guessing.

Most small businesses have not started yet

HMRC's own research shows how far there is to go. In a survey of 800 small and medium sized businesses carried out in early 2025, 29% said they used e invoicing, but only 15% sent invoices that way. PDF or email was used by 95% to send invoices, and 91% could not recall seeing any HMRC messaging about e invoicing.

That gap is not a reason to panic, because there are still more than two years to go. It is a reason to avoid being one of the businesses that discovers the problem in early 2029, when every software supplier and developer is busy.

What to audit first

The useful work you can do now costs nothing and does not depend on the roadmap.

1. List every place an invoice is created. Accounting software, booking system, online shop, trade portal, templates. Include anything that sends a VAT receipt to a business customer.
2. Mark which invoices go to businesses or public bodies. Those are the ones in scope. Consumer sales can be set aside.
3. Find out who maintains each system. For off the shelf products, ask the supplier whether they plan to support Peppol and by when. For anything custom, find the developer or the code.
4. Check the data is there. A structured invoice needs clean, consistent fields: your customer's legal name and VAT number, line items, VAT rates and totals. A system that only ever produced a nicely formatted PDF may not store these cleanly.
5. Decide the route for each system. Usually that means either connecting the system to your accounting software so invoices are raised there, or connecting it directly to a Peppol service provider.

Do not rush to replace anything. The aim this year is a short list that tells you which systems are fine, which need a supplier answer and which need work.

When a custom booking or ordering system needs changing

For most businesses, the cheapest fix will be to stop the custom system issuing invoices itself and have it pass the sale into accounting software that handles e invoicing. That keeps one source of truth and lets your accounting provider carry the compliance burden.

Where invoicing is built deep into how the system works, for example a trade portal that bills on dispatch with account specific pricing, a direct connection to a Peppol provider can make more sense. That is a defined, testable piece of web app development rather than a rebuild, and it is much easier to plan once the standards are out.

There is an upside too. The government's own announcement pointed to an NHS trust that processes e invoices within 24 hours, against 10 days for paper. Invoices that drop straight into a customer's system tend to get paid sooner.

If you are not sure whether your booking or ordering system will need changing, book a free 15 minute call and we will tell you honestly, including when the answer is that your existing software already covers it.

Frequently asked questions

Do I need e invoicing if I am not VAT registered?

The mandate is framed around VAT invoices, so a business that is not VAT registered is not expected to be caught by it. You may still receive e invoices from suppliers, and some customers may prefer them. Check the roadmap published with the Budget on 28 October 2026 for the final scope.

Will a PDF invoice still be valid after April 2029?

For sales to other businesses and public bodies where VAT is due, the government has said a PDF will not count as an e invoice. For sales to consumers, the mandate does not apply, so PDF receipts and invoices can carry on. The detailed rules will come in the guidance that follows the roadmap.

How much will e invoicing cost a small business?

The government expects software providers to offer low cost options, and many accounting products are likely to include e invoicing in existing plans. The cost that varies is changing your own systems, such as a custom booking or ordering tool. That depends on how invoices are generated today, which is why the audit comes first.

Do I have to send invoices through HMRC?

No. The UK has chosen a decentralised model, where invoices travel between businesses through their software providers over the Peppol network. HMRC has said it will not introduce real time invoice reporting in 2029, though it may look at it later.